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ID: 1207363 • Letter: H
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According to Table 20.2, what is the opportunity cost of 1 computer in the Philippines?
2 units of food
Three-fifths of a unit of food
One-sixth of a unit of food
6 units of food
1 unit of food
The data in the table below assumes that with the same quantity of resources, both Australia and Philippines produces food and computers. Australia can make 1,000 computers or 2,000 units of food in a day, and the Philippines can make 200 computers or 1,200 units of food in a day.
Table 20.2
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Explanation / Answer
d) 6 units of food i.e. to produce 200 computer its opportunity cost is 1200 units of food,similarly it is 600 unit of food for 100 unit of computer and for 1 unit of computer it is 6 unit of food.
Opportunity cost formula = return of most lucrative option - return of chosen option
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